New York No-Fault By Report Billing: Insurance Carrier Verification Requirements Explained

Understanding No-Fault Insurance “By Report” Requirements in New York

The “by report” (BR) designation in New York’s No-Fault insurance system continues to generate significant litigation, particularly regarding what constitutes a prima facie case when challenging insurance denials. The recent Second Department decision in Bronx Acupuncture Therapy, P.C. v Hereford Ins. Co., 2019 NY Slip Op 06059 (2d Dept. 2019), provides crucial clarification on these requirements.

The Bronx Acupuncture Therapy Case: Legal Analysis

This Second Department decision addresses a fundamental question in No-Fault litigation: when a service is designated “BR” (by report), must healthcare providers prove compliance with the by-report requirement as part of their prima facie case? The court’s analysis provides important guidance for medical providers and insurance carriers alike.

Background: What is “By Report” Billing?

In New York’s No-Fault insurance system, certain medical procedures and treatments don’t have preset fees in the fee schedule. Instead, they’re designated as “by report,” meaning providers must submit detailed documentation justifying the charges. This system allows for flexibility while requiring additional verification.

The by-report designation typically applies to:

• Unlisted or experimental procedures
• Complex treatments requiring individualized assessment
• Services not covered by standard fee schedules
• Modalities requiring special justification

The Court’s Reasoning: Insurance Carrier’s Burden

The Second Department’s analysis in Bronx Acupuncture Therapy reveals the court’s understanding of the burden-shifting framework in No-Fault litigation. The decision emphasizes that insurance carriers bear the initial responsibility for seeking additional verification when claims appear insufficient.

“We agree with the Appellate Term’s determination that the denial of the plaintiff’s claim for services billed under CPT code 97039 was without merit as a matter of law. Although an unlisted modality must be justified by report, this requirement has no bearing on the insurer’s burden of requesting additional verification in the first instance (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 319), which the defendant insurer did not do.”

Historical Context: The DME Analogy

The court’s approach mirrors historical developments in No-Fault law regarding durable medical equipment (DME) billing. For years, the Appellate Term required DME providers to prove their bills reflected 150% of wholesale cost as part of their prima facie case. This created significant barriers for providers seeking payment.

However, approximately thirteen years ago, courts overruled this line of cases, holding that the DME bill itself constituted prima facie proof of cost. This shift recognized that imposing additional evidentiary burdens on providers undermined the No-Fault system’s efficiency goals.

Implications for New York No-Fault Practice

The Bronx Acupuncture Therapy decision has far-reaching implications for No-Fault insurance litigation throughout New York, affecting both healthcare providers and insurance carriers.

Impact on Healthcare Providers

For medical providers billing No-Fault carriers, this decision provides important protection against overly restrictive denial practices. Key benefits include:

• Reduced prima facie burden – Providers need not prove by-report compliance upfront
• Carrier verification requirements – Insurance companies must request additional information before denying claims
• Litigation advantages – Stronger position in summary judgment motions
• Cost efficiency – Less documentation required for initial submissions

Challenges for Insurance Carriers

Insurance carriers face increased obligations under this framework:

• Active verification duty – Must request additional documentation when claims appear insufficient
• Cannot deny without inquiry – Automatic denials for by-report services may be improper
• Documentation requirements – Must maintain records showing verification requests
• Higher scrutiny – Courts will examine whether carriers met their verification obligations

The Broader Framework: Hospital for Joint Diseases

The Bronx Acupuncture Therapy decision builds upon the Court of Appeals’ landmark ruling in Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 319. This case established the fundamental principle that insurance carriers must actively seek verification rather than automatically denying claims for insufficient documentation.

The Verification Process

Under the Hospital for Joint Diseases framework, insurance carriers must:

1. Review submitted documentation – Examine whether provided information is sufficient
2. Request additional verification – Seek clarification when documentation appears insufficient
3. Allow reasonable response time – Give providers opportunity to supply requested information
4. Make coverage decisions – Only deny claims after completing the verification process

Strategic Considerations for Legal Practice

The Bronx Acupuncture Therapy decision offers strategic guidance for attorneys representing both providers and carriers in No-Fault litigation.

For Provider Counsel

Attorneys representing healthcare providers should:

• Challenge automatic denials of by-report services
• Examine whether carriers requested additional verification
• Argue prima facie case requirements don’t include by-report compliance proof
• Emphasize carrier’s duty to seek clarification before denial

For Carrier Defense Counsel

Insurance company attorneys should:

• Ensure proper verification procedures are followed
• Document all requests for additional information
• Avoid automatic denials without investigation
• Maintain detailed records of verification efforts

Related No-Fault Insurance Issues

The by-report requirement intersects with various other aspects of New York’s No-Fault system, including general No-Fault coverage, medical billing disputes, and insurance claim denials. Understanding these connections is essential for comprehensive representation.

Common By-Report Billing Scenarios

Healthcare providers frequently encounter by-report billing requirements in various clinical situations:

Physical Therapy and Rehabilitation

• Unlisted therapeutic procedures
• Complex manual therapy techniques
• Specialized equipment-based treatments
• Individualized exercise programs

Diagnostic Services

• Experimental imaging procedures
• Specialized laboratory tests
• Novel diagnostic techniques
• Multi-step evaluation protocols

Pain Management

• Innovative injection procedures
• Combination treatment protocols
• Specialized nerve blocks
• Multi-modal pain therapies

Frequently Asked Questions About By-Report Billing

What happens if an insurance carrier doesn’t request verification for by-report services?

Under Bronx Acupuncture Therapy, automatic denials without requesting additional verification may be improper. Carriers must actively seek clarification before denying by-report claims, and failure to do so may result in coverage being required as a matter of law.

Do healthcare providers need to prove by-report compliance in their initial submissions?

No. The Second Department clarified that by-report requirements “have no bearing on the insurer’s burden of requesting additional verification in the first instance.” Providers don’t need to prove compliance as part of their prima facie case.

How long do insurance carriers have to request verification for by-report services?

While the decision doesn’t specify timeframes, carriers should request verification promptly after receiving claims. Delays in seeking clarification may undermine denial defenses and suggest the carrier failed to meet its verification obligations.

Can insurance carriers still deny by-report claims after requesting verification?

Yes, but only after following proper verification procedures. Carriers must request additional information, allow reasonable response time, and evaluate the provider’s response before making coverage decisions. Denials must be based on substantive review, not procedural defaults.

What types of documentation satisfy by-report requirements?

By-report documentation typically includes detailed procedure descriptions, medical necessity justification, time spent, complexity factors, and comparison to similar procedures. The specific requirements may vary depending on the service type and clinical circumstances.

Future Implications and Appeals Process

The Bronx Acupuncture Therapy decision represents current Second Department precedent, but the legal landscape continues evolving. Future appeals may test this paradigm, particularly regarding:

• Specific verification procedures required
• Timeframes for carrier response obligations
• Standards for evaluating by-report justifications
• Interaction with other No-Fault requirements

Conclusion: Lessons for No-Fault Practitioners

The Second Department’s decision in Bronx Acupuncture Therapy provides important clarity on by-report billing requirements in New York’s No-Fault system. The ruling emphasizes insurance carriers’ obligation to actively seek verification rather than automatically denying claims for insufficient documentation.

For healthcare providers, this decision offers protection against overly restrictive denial practices and reduces the evidentiary burden for establishing prima facie cases. For insurance carriers, it underscores the importance of implementing proper verification procedures and maintaining detailed documentation of all review efforts.

As the legal framework continues developing, practitioners must stay current with evolving requirements and ensure their clients comply with both statutory obligations and judicial interpretations.

If you’re dealing with No-Fault insurance disputes or by-report billing issues, experienced legal representation is essential. Call 516-750-0595 for a free consultation with attorneys who understand New York’s complex No-Fault system and can protect your interests throughout the claims process.

The Law Office of Jason Tenenbaum provides comprehensive representation in all aspects of No-Fault insurance litigation, from initial claim submissions through trial and appeal. Our experienced team understands the nuances of by-report billing requirements and works diligently to achieve favorable outcomes for our clients.

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Legal Update (February 2026): The New York No-Fault fee schedules and by-report billing requirements referenced in this 2019 post may have been subject to regulatory amendments or Department of Financial Services updates since publication. Practitioners should verify current fee schedule provisions, by-report documentation requirements, and any procedural changes that may affect prima facie case requirements in No-Fault litigation.